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Saturday, December 25, 2010

Malls expand and upgrade to stay ahead of the competition

WITH new malls being developed all the time, shopping complexes that have been around a while need to continue to re-invent themselves to keep up with the competition. So what do these malls have to do to stay attractive and be able to pull in the crowds'

Kevin Tan Gar Peng ... ‘We designed the mall in such a way that coming here would be more of an adventure than just a shopping trip.’

The Sunway Pyramid shopping centre, which has been around since 1997, is still being continuously upgraded to keep up with the competition, says Sunway IFM Sdn Bhd retail division chief operating officer Kevin Tan Gar Peng.

Due to demand for added space, we are expanding a section of our mall after Chinese New Year (which falls in early February), he says in an interview.

The upgrade, says Tan, will comprise the addition of three levels of retail space.

There will be another phase of expansion. Collectively, both phases will have a collective gross lettable area of 300,000 sq ft, Tan says, adding that it is too early to reveal the total investment cost for the upgrade.

He says there is always room for improvement at the mall. The Sunway group has already invested some RM550mil in upgrades since the malls first inception.

About RM30mil was spent to upgrade and improve the fly-overs and connecting roads around the shopping centre to improve accessibility to the mall, Tan says.

Sunway Pyramid trumped all entries at this years FIABCI awards to become the Best Retail Development 2010.

Of course, our goal is not to win awards. But winning it is a bonus and a testament to our hard work. Winning encourages us to work harder, says Tan.

He says the mall spends about RM3mil annually to light up the surrounding area of the mall during festive seasons.

According to Tan, the mall has been experiencing full take-up for the past seven years, with current rental rates at about RM10 per sq ft.

This is in spite of the continuous expansion weve been making to the mall.

Compared to other malls in the country, the Sunway Pyramid shopping centre has the advantage of being near a hotel and a theme park namely the Sunway Resort Hotel & Spa and Sunway Lagoon.

Our strategic location provides a choice to people who come here, says Tan.

Arab tourists who come with their families enjoy this option very much. The men like the facilities that the hotel offers. Their children love the rides at the theme park and their four wives can enjoy the shopping lifestyle, Tan enthuses.

The appeal of the Sunway Pyramid shopping mall, especially to the Arabs, could also be because of its Egyptian-inspired pyramid and lion statue at the main entrance.

Tan says the mall is the countrys first themed shopping and entertainment centre.

We designed the mall in such a way that coming here would be more of an adventure than just a shopping trip.

Pulling in the crowds

According to reports, property consultants expect 20 new malls with a combined net floor area of 4.4 million sq ft to be opened this year.

According to statistics by the National Property Information Centre, as at March 2010, there were 49.98 million sq ft of existing retail space within the Klang Valley. A further 7.18 million sq ft is under development and 7.5 million sq ft of new space planned.

Citing data from the Malaysian Association for Shopping and Highrise Complex Management, Tan says there are currently about 300 shopping malls in the country, with half of them in the Klang Valley alone.

The competition (for malls) level in the Klang Valley is great. However (with the global economy picking up), tourist arrivals into the country have increased this year. That helps to support the malls.

However, while the improved economic outlook has seen a tourist influx into the country, other countries, especially Singapore, have been luring Malaysian tourists to their malls, says Tan.

Singapore is aggressively promoting their tourist destinations, such as Resorts World Sentosa, here.

According to statistics from Singapores tourism board website, the number of Malaysian travellers into Singapore increased 40.2% to 95,371 for September 2010 from 68,008 in the previous corresponding period.

For the nine-month period ended September, the number of Malaysian travellers rose 44.5% to 724,528.

According to various reports, the surge in tourist arrivals into Singapore has been attributed to the opening of Resorts World Sentosa and Marina Bay Sands earlier in the year.

Tan adds that with the advent of budget airlines, travelling has become cheaper.

With cheaper flights now, more Malaysians are going abroad but that does not mean that the same amount of foreigners are coming in, he says, adding that local malls need to aggressively market their products or risk losing customers.

Looking forward, Tan is optimistic about the local retail sector. He says that the Governments proposal under Budget 2011 to abolish import duty on 300 goods preferred by tourists is a good move.

The move now makes branded goods more affordable. Now, shoppers dont have to travel overseas to buy such goods, he says.

By The Star

Making KL a greater place

With the NKEA in mind, it is time to make GKL a livable place which is clean and peaceful, and filled with environment-friendly economic activities producing high-quality, high-value goods and services.

MANY analysts compare, rather simplistically, the economy of Singapore with that of Malaysia. This is like comparing apples with oranges.

The two economies cannot be compared in that simplistic manner because of the markedly different economic structure of two, with Malaysia having a large rural sector and abundant land, and Singapore, a service-oriented trading economy.

It would be more meaningful to compare Singapore with Greater Kuala Lumpur (GKL), or what was often referred to as the Klang Valley.

After all, the latter is already very urbanised and is endowed with modern infrastructure.

The inclusion of GKL as one National Key Economic Area (NKEA) is befitting given that it is the epitome of our economic space and national urban system.

In fact, we can take up issue with the physical and development planners of GKL if the region fails to perform socially, economically and culturally, on the scale achieved by city economies like Singapore and Hong Kong.

The GKL region should be the leader in productivity and intellectual capital creation in various fields especially in services such as finance, education, communication and the arts, and high-value manufacturing where intellectual capital and K-economy-related activities are the natural choice.

To date, the GKL has expanded much on the basis of organic growth.

The processes of population concentration and agglomeration have led to what GKL is today.

Its status as the national capital attracts many business houses to establish their headquarters in Kuala Lumpur, thus putting pressure on space and impacting property value.

Thanks to earlier efforts, we have been able to avoid GKL from becoming a primate city, such as Manila, Mexico City, Bombay, and Cairo, with the attributes of over-population.

Indeed, the earlier years of development concern for regional disparity restrained GKL from overexpansion and as such, growth was dispersed to other parts of the country, as expected by the spirit of federalism.

In fact, on realising this, the seat of Federal Government administration was moved to Putrajaya, leaving Kuala Lumpur to become the financial and commercial centre of the country.

In line with the NKEA objective, let us make GKL a livable place, clean and peaceful, and filled with economic activities which are environment-friendly yet producing high-quality, high-value goods and services.

These activities will have a high content of intellectual capital.

GKL does have the potential to attract high-return activities such as banking and finance, tourism, advertisement and professional services such as legal, accounting, engineering, healthcare and arts and design.

The presence of premier tertiary educational institutions in and around GKL can help spur the growth of these activities in the area.

The lower costs such as rentals of premises in the GKL compared with the rates in Singapore, Hong Kong and Bangkok can attract these services.

In the same breath, GKL should not be the location of manufacturing activities which demand high-labour content and low technology.

Other places where labour is still plentiful can be the location of such industries.

This is one reason why regional corridors are established.

The GKL, which covers various urban conurbations and the surrounding townships of Klang, Kajang, Bangi, Putrajaya, and Shah Alam, has to be targeted as a planned modern urban space and that its untoward features of squatters, traffic jams and unhygienic stalls have to be phased out or upgraded speedily to befit the region as the foremost urban centre of the nation.

The transition has taken place, with Shah Alam, Bangi and Putrajaya leading the pack, but its momentum has to be expedited.

The mindset of urbanites in GKL have to change fast to accommodate the emerging status of GKL.

It is heartening to see that public transport has been given due emphasis in the National Key Result Area and the NKEA of the current administration.

Indeed, the issue of traffic jams in the city of Kuala Lumpur, especially on Friday evenings and particularly when it rains, demands a strong political will to address as it is the consequence, in part, by our car ownership policy.

On this matter, an independent transport and road planning body can be given the task to plan and carry out road and transport planning in the region, having regard for the current multiplicity of agencies with power to influence transport system in GKL.

A final point that is worth reflecting is the position of Kampung Baru and Chow Kit in the context of future urban renewal expected to take place under the impetus of the NKEA of developing the GKL.

The cultural and historical elements of urban planning have to be equally considered and there is no better window than capitalising on the opportunities arising from new developments of GKL, which has to grow with an identity of its own.

By The Star

Demand for green buildings on the rise

The Securities Commision premises is a good example of a green building.

WITH leading multinational corporations at the forefront to lease green office space, the demand for green buildings in Malaysia will continue to rise as environmental awareness grows and more companies embrace the practice of corporate social responsibility.

Another driver is the growing body of evidence demonstrating that green buildings make financial sense.

CB Richard Ellis (Malaysia) vice-president research, Nabeel Hussain says there is growing recognition that key participants in the countrys real estate sector have a responsibility to adopt sustainable building practices and related technologies in order to play a pro-active role in climate change mitigation.

Malaysia has introduced its own green rating system, the Green Building Index (GBI) in 2009. The Government is supporting the drive towards green buildings and technology and its Budget 2010 was the first one ever to give priority to the procurement of goods and services that are environmentally friendly, he adds.

Nabeel reveals that studies by CB Eichard Ellis on mature markets such as the United States and Australia have found that developing green buildings can help landlords achieve higher values, fetch higher rents and enjoy higher occupancy rates than comparable non-green buildings.

In an ongoing study of national office portfolio in the United States managed by CB Richard Ellis, the company concludes that sustainable buildings are expected to generate stronger investment returns than traditionally-managed properties.

The study found that owners of sustainably-managed buildings anticipate 4% higher return on investment than owners of traditionally-managed buildings, as well as 5% increase in building value.

Roughly 79% of owners surveyed believe that sustainable properties perform well in attracting and retaining tenants, yielding a 5% increase in building occupancy and 1% increase in rental income, Nabeel says.

This is the second phase of a multi-year study initiated in 2009 by CB Richard Ellis and the University of San Diegos Burnham-Moores Center for Real Estate.

The largest and longest-running study of its kind, the ongoing analysis benchmarks and measures green building benefits and economic results as a framework of investment criteria for retrofit activity.

According to the study, tenants in sustainably-managed buildings report increased productivity, satisfaction and health. Roughly 10% of tenant respondents have seen

increased productivity, 94% of tenant managers register higher employee satisfaction in green space and 83% of tenants believe their green space provides a healthier working environment.

The study defined a green building as those with Leadership in Energy and Environmental Design (LEED) certification at any level or those that bear the EPA Energy Star label. All Energy Star buildings in the survey group had been awarded that label since 2008. Most of the buildings included in the research cohort had also adopted other sustainable practices like recycling, green cleaning and water conservation.

CB Richard Ellis was recently ranked 30 among Newsweeks greenest companies in America, and occupied top spot in the financial services sector. The US Environmental Protection Agency has named CB Richard Ellis an Energy Star Partner of the Year for the past three years, including recent recognition for Sustained Excellence.

Nabeel says the US Green Building Council has awarded CB Richard Ellis its Leadership Award for Organisational Excellence and the industry group, CoreNet, recognised CB Richard Ellis with a special commendation for Sustainable Leadership and Design Development.

In Asia, CB Richard Ellis recently won a Merit Award for Interior Projects in an Existing Building at Hong Kong Green Building Councils 2010 Green Building Awards, in relation to its office relocation in Hong Kong.

CB Richard Ellis new office premises in Hong Kong, Shanghai and Mumbai have been designed and constructed in accordance with LEED best practices.

By The Star